It’s a great time to be going to Malaysia, since even though fuel prices are sinking some US carriers, there’s an airfare price war that has the Malay, Chinese and Indian residents of this republic traveling mightily. The country’s flag carrier, Malaysia Airlines is apparently threatening the survival of Air Asia by charging too little.

I am heading to this part of the world next month, to observe the Rainforest Music Festival in Kuching, Sarawak, Borneo. Both carriers have gone on a price war for customers when Malaysian’s subsidiary airline, Firefly, announced it was offering free flights for domestic destinations, followed by other destinations in Asia.

Then budget carrier AirAsia countered with free seats to international destinations. Despite the rising fuel costs, Malaysian airlines now offers the lowest priced tickets in the region.
Tony Fernandes of AirAsia claims unfair competition will “eat” into AirAsia’s revenue base of offering low cost flights.

Despite its efforts to promote Malaysia aggressively internationally and liberalization of thecountry’s aviation industry, it is still not allowed to increase flights to Singapore from other points in Malaysia, as well as fly to international destinations.

“AirAsia spent A$320,000 to promote Malaysia’s tourism industry in Australia.”
In a plea aimed at swaying the public opinion, Fernandes asked, “The government will never allow Malaysian Airlines to fail. But who is going to save us?”